Efficiency Progress and Productivity Change in Romania Machinery Industry 2001–2010

Abstract

Machinery industry is an important economic key in Romania. In the period 2001-2010 the industry was faced with significant inputs of foreign direct investments that have led to stimulating the development of the economy. This paper examines the efficiency an d productivity of enterprises (more than 250 employees) in machinery industry which are part of a emerging markets. In the machinery industry there are companies that deal with the cars manufacture, machinery and equipment and the manufacture of motor vehicles and their components. Techniques selected for evaluation of progress efficiency and changing productivity studied are Data Envelopment Analysis (DEA) and the Malmquist productivity index (MPI). This methodology allows a direct comparison between firms within t he same industry and shows how intense inputs are used in a production system from which we want to realize a high level of output. The used program to calculate indicators of productivity and efficiency frontier was DEAP 2.1. (Data Envelopment Analysis Computer) developed by the Centre for Efficiency and Productivity Analysis of the University of New England. Analysis of positive or negative trends in the efficiency and productivity of enterprises in the studied period reveals information about the sources of existing inefficient. This paper is mainly aimed at measuring the technical efficiency and productivity change in the machinery industry in Romania between 2001-2010 and as secondary objective to determine the inefficient sources in industry. The results of the study show that the tendency of growth of total factor productivity (TFP) is due in particular to the efficiency progress and not to the technological change, what demonstrates that human resource quality has had a positive impact on the industry. Productivity is viewed as a competitive advantage, so companies that have increased productivity, even in a time of crisis, are based on modern management and performance.